Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments And Contingencies

Commitments and Contingencies

Credit Risk

The Company maintains cash balances at various financial institutions primarily located in San Diego, California. Accounts at the U.S. institutions are secured, up to certain limits, by the Federal Deposit Insurance Corporation. At times, balances may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes that the Company is not exposed to any significant credit risk with respect to its cash and cash equivalent balances.

Litigation

The Company is, from time to time, the subject of claims and suits arising out of matters occurring during the normal course of operations.  In the opinion of management, no pending claims or suits would materially affect the financial position or the results of the operations of the Company.

Leases

We lease our domestic and certain foreign facilities and other equipment under non-cancelable capital and operating lease agreements, which expire at various dates through 2023. In addition to the minimum future lease commitments presented below, the leases generally require that we pay property taxes, insurance, maintenance and repair costs, such expenses are not included in the operating lease amounts.

At December 31, 2015, future minimum lease commitments are as follows (in thousands):

2016	$	1,199
2017		1,010
2018		760
2019		371
2020		345
Thereafter		834
Total	$	4,519

Rent expense was $1,043,000 and $840,000 for the years ended December 31, 2015 and 2014, respectively.

In connection with our acquisition of FDI, we assumed mortgage guarantee obligations made by FDI on the building housing our New Hampshire office.  The balance of the mortgages is approximately $1,900,000 as of December 31, 2015 (see Note 3, above).  

The Company purchases its inventory from multiple third-party suppliers at competitive prices. The Company made purchases from three vendors, which individually comprised more than 10% of total purchases and in aggregate approximated 61% and 60% of total purchases for the years ended December 31, 2015 and 2014, respectively. 

The Company has purchase obligations related to minimum future purchase commitments for green coffee to be used in the Company’s commercial coffee segment for roasting.  Each individual contract requires the Company to purchase and take delivery of certain quantities at agreed upon prices and delivery dates.  The contracts as of December 31, 2015, have minimum future purchase commitments of approximately $1,327,000, which are to be delivered in 2016.  The contracts contain provisions whereby any delays in taking delivery of the purchased product will result in additional charges related to the extended warehousing of the coffee product.  The fees can average approximately $0.01 per pound for every month of delay, to-date the Company has not incurred such fees.